Warid seeks partnership

Warid Telecom, the fourth largest mobile phone operator, is on the lookout for a partner to raise fresh capital for investment in the next phase of operations in Bangladesh.
Warid made its Bangladesh debut as the sixth mobile operator in May 2007 and has bagged 2.5 million subscribers until March 09. Partnership is crucial to Warid as its investment cost is higher than the other market operators because of “discrimination” in frequency allocations, said officials of the company.
“We are willing to invite a partner, as a huge investment is required to take our operations to next level,” said Muneer Farooqui, chief executive officer of Warid Telecom.
Farooqui was speaking to The Daily Star on the sidelines of the press meet that was organised to celebrate the company’s second year of operations in Bangladesh.
Several companies, such as SingTel, Vodafone and Etisalat, had approached Warid to form a partnership in Bangladesh.
“Nothing on the matter of a partnership has been finalised as yet,” he said. “However, Warid’s shareholders are committed to the next level of operations here,” Farooqui said.
Among the bottom three operators, Warid is a lucrative option for prospective investors, as the company is the lone owner of the next generation networks. However, the company’s network expansion plans have been disrupted due to a lack of frequency.
Farooqui explained that Warid is now operating only with 1800 MHz of frequency, while other operators own both 1800 MHz and 900 MHz of frequency.
“We have given a notice to the government in this regard, but nothing has materialised,” said Farooqui.
He said this frequency specification requires large capital spending.
Talks of either a merger, acquisition or a new partnership in the telecom industry has widely been discussed over the last few years, as the bottom three operators have failed to gain significant market shares.
At present, Grameenphone, Banglalink and AKTEL dominate more than 90 percent of the 45 million customer mobile market.
Top officials of the leading mobile phone operators are already anticipating that a merger or acquisition will take place in the six-operator market.
A major partnership took place last year: NTT DoCoMo, Japan’s largest telecom operator, bought AK Khan and Company’s 30 percent stake in AKTEL for $350 million.
Issues over a new partnership again came to light when AFK Sistema, the owning company of Russia’s largest mobile phone operator OAO Mobile TeleSystems, expressed interest in July 2008 to buy an operator, either a GSM or a CDMA.
In a press statement, the Warid CEO said he hopes to triple the company’s subscriptions in the next three years. The major areas Warid is looking at are the untapped markets and new innovative products, which are yet to be offered by the other operators.
Bangladesh’s present mobile penetration is 30 percent.
Farooqui said returns have been unimpressive over the last two years, but its next generation network is an outstanding technology and is capable of doing something unique in the highly competitive market.
In terms of subscriber base, Warid has a 7 percent market share and has so far invested $600 million in Bangladesh. The monthly average revenue per user stands at around Tk 170 for the company.

Courtesy of The Daily Star